Some revenue options may be considered by the Galesburg City Council when adopting the next fiscal year budget.
The City is facing a projected $1.4-million deficit, which caused aldermen to review anticipated dollar figures during a special work session meeting Monday night.
A relatively flat Equalized Assessed Valuation is anticipated and is currently confronted by rising Police and Fire Department pensions according to City documents.
City Manager Todd Thompson says the current pension system has real “problems.”
“IMRF is about 70-percent funded, firefighters 53, police 59,” says Thompson. “Even with all those significant contributions that we’ve given over time, the funding status of police and fire has gone done. You’d think that by dumping all that money in there, it would go up, but it continues to go down.”
While no official proposal was made, to offset the anticipated budget deficit, a mix of property tax levy possibilities was put forward – all of which increase the property tax levy that may ultimately be put toward the Police and Fire Department pension funds.
The City Council also has the option to increase sales taxes or natural gas taxes, among others options, to mitigate those future challenges.
Despite the available options in fiscal year 2015, City Administration implied there are more attractive levels of funding than others. Thompson says there are three primary methods the City can use to determine how to fund its pension contributions.
“One would be GASB (Governmental Accounting Standards Board), and that’s what our City policy provides that we would fund it at,” says Thompson. “Second would be what the actuary recommends and that’s a little bit lower, and the third would be what the minimum state requirement is, but minimum state requirement is very low and to fund it at that level is inviting disaster.”
This coming year, a General Fund contribution of $429-thousand is anticipated for those two pension funds.
While reviewing some of those other fees, it was learned the City of Galesburg is anticipating increases in its water and refuse rates.
The City Council will use the information presented Monday to mold their 2015 fiscal year budget as the end of the year draws closer.